'I paid insurance for 25 years then had to find £715 extra for knee surgery': The tricks health insurers are using to cut costs

Private medical insurance was once a passport to hotel-like hospitals with cordon bleu food and treatment where and when you like. But soaring costs mean many patients are not getting the cover they signed up for.

What a carry on: Private health insurance policyholders often find that the service they get is not what they expected.

THE 52 PER CENT RISE IN YOUR PREMIUMS

Over the past couple of years the £5 billion-a-year private medical insurance industry has been hit by soaring costs.

Returns from investments that these firms traditionally used to bolster their profits have plummeted.

This toxic cocktail means insurers need to find some way to claw back cash — so ordinary policyholders are being forced to pay the price.

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Health insurance premiums increase as
you get older and make more claims, and have risen by 52 per cent to
£1,070 a year, according to analyst Laing & Buisson.

Some
insurers are trying to offset rising drug and hospital bills by
introducing new terms and conditions that exclude customers from
claiming. This could leave patients having to dig into their own pockets
to fund their care.

Not
surprisingly, all this has gone down badly with patients. Figures from
independent watchdog, the Financial Ombudsman Service, reveal complaints
about private health insurance have surged 21 per cent so far this
financial year.

'I HAD TO PAY £715 FOR KNEE SURGERY'

When accountant Graham Davies began to suffer pains in his knees, he hoped the Bupa policy he had paid for 25 years would cover him.

Mr Davies was referred by his doctor to a specialist for a routine operation called an arthroscopy — a tiny camera is inserted into the knee to investigate for damage.

Cover for this had dropped from £589 to £335 — meaning Mr Davies had to find £715 for his £1,050 operation.

‘These changes were brought in the weeks after I renewed my policy. I am furious’ says Mr Davies, 52, from Harrow, North London.

Bupa says Mr Davies was warned about the shortfall.

Common concerns include policyholders being unable to see the doctor they want or get the treatment they need.

A
spokesman for campaign group the Private Patients’ Forum (PPF) says:
‘There needs to be a more intelligent conversation between some in the
private medical insurance business and their customers. We hear many
concerns from people insured as individuals or on company schemes.’

EYE OPERATIONS IN A SHOPPING CENTRE

Choice over whom you can see and where you can get treatment is being whittled away.

Some
big insurers have introduced approved lists of doctors. In some cases,
if a local specialist is not on your insurer’s approved list, you may
have to travel to see one who is or pay extra costs out of your own
pocket.

Restrictions brought in last year by Britain’s biggest private health care firm Bupa are the most controversial.

It
has introduced a list of approved consultants for business customers.
And it has slashed the amount it will pay for common procedures, from
hip replacements to hysterectomies, by up to 63 per cent.

It
means Bupa customers can no longer get treatment from surgeons who
charge above this level without footing some of the bill themselves.
However, Bupa says it will cover all costs if they use one of its
fee-assured doctors.

Alternatively,
the firm is asking customers to have cataract operations at branches of
opticians Optical Express — often found in shopping centres or town
centres — as part of a deal thrashed out in the past year.

Bupa
claims cutting fees is justified because operation times have fallen.
It argues some doctors’ fees are inflated. It also says it has increased
consultant payouts in a number of cases.

The
British Osteopathic Association claims an estimated 800 osteopaths
stopped accepting Bupa patients as a direct result of the changes. It
claims the fees Bupa sets, typically between £30 and £50 a time, are
lower than many osteopaths charge.

Bupa
denies this and says it judges osteopaths on quality and value for
money. It claims 190 osteopaths have left and there is no set fee.

‘A
93-year-old patient, whom I have been treating for 30 years, rang
asking me to visit him. I explained that Bupa will not pay my fees. He
was very cross, especially as he had paid a £1,700 premium the day
before.

‘Understandably, at his age he does not want to see another osteopath.’

Experts
say other insurers look likely to bring in similar changes. The
British Osteopathic Association also says its members have not charged
Bupa an inflated fee.

AXA
PPP, Britain’s second biggest insurer, has imposed caps on a number of
procedures and introduced a list of approved doctors.

Policyholders
who want to see a doctor on its non-approved list receive only partial
funding. It says: ‘We pay 97 per cent of the fees submitted to us for
treatment of our members in full.’

Aviva,
another big insurer, says it has a list of fee-approved consultants,
and patients will have to pick up the shortfall if they choose another
specialist.

‘Members are treated by consultants with at least seven years experience,’ says Bupa.

‘Fee-approved
consultants are just as experienced as consultants who charge higher
prices. We make no apology for ensuring we pay a fair price for
treatment, which keeps premiums affordable.’

DRUGS STOPPED AFTER ONE YEAR

Cancer treatments are becoming ever more sophisticated, but their costs are spiralling.

The NHS spends £1 billion a year on cancer drugs. A course of Herceptin, typically given to stomach cancer patients, is £10,000.

There can be big differences between policies. Some insurers will pay for drugs in full, while others impose limits.

One
way some insurers cut down on these bills is to make customers turn to
the NHS first. Only if it’s not possible to get the drugs funded by the
taxpayer will the insurer pay up.

Those
who do manage to get their insurer to pay up may find tight limits on
their cover. Often these patients are told they will get treatment only
over a set time — typically 12 months.

If
they need longer they must ask their insurer to extend their treatment.
If it refuses, they have to return to the NHS — often being forced on
to a waiting list.

A
recent study from drugs firm Roche found nearly half of bowel cancer
patients surveyed and more than a third of breast cancer patients had
to plead with their insurer for extended cover.

So-called
targeted treatments — a cocktail of drugs tailored to a patient’s own
needs — are a lifeline for many cancer sufferers. But here, too, some
firms are introducing limits on the amount of treatment they will
cover, typically for one year.

Penny
O’Nions, a health insurance broker, says one client recently fell foul
of the rules. While a consultant had told her she needed another round
of targeted drugs to treat her cancer, an insurer had turned her down.

‘She was absolutely distraught,’ says Dr O’Nions. ‘All she had wanted was to see her daughter’s wedding.’

Dr O’Nions eventually managed to win the treatment for the patient.

Other
insurers have limits on what they are willing to pay. Simply Health
will cover up to £50,000 of cancer treatment over the policy’s lifetime.

£250 FOR PATIENTS WHO’LL USE THE NHS

Including treatment, it can cost £3,000 a night for a stay in a private hospital — according to figures from insurer WPA.

So firms are trying to shift these costs on to the taxpayer.

Patients are being given pay-offs worth hundreds of pounds for having their treatment on the NHS.

PruHealth will hand you up to £250 every night you spend in an NHS hospital, up to £2,000 a year.

Neville
Koopowitz, chief executive of PruHealth, says: ‘We aim to provide our
customers with as much choice as possible. That is why we provide the
option of choosing NHS treatment and receiving a cash amount.’

Several
insurers promise a cut in premiums in return for you having all of your
treatment on the NHS, provided your treatment can start within six
weeks.

An ABI spokesman
says: ‘Sometimes the NHS might be the right choice for you. The insurer
is giving you something back because you have not cost them anything
for private treatment.’